It is complex. I was going to write out how it works in a simple way that everyone could understand - but then I realized that even though it would be a gross simplifications that are unrealistic, it still would be so complex that people would go "yep I understand that to every step", and then finish and not understand it. Every step alone makes perfects sense and is simple, but the total quickly gets complex.

Even calling this a speculative market is a gross simplification of the truth.